1. The Organizational Age Key Terms
Chapter 20
The Organizational Age Key Terms

2. Formal organization Synonymous with rational organization, a group created to pursue definite goals wherein tactics and procedures are designed and evaluated in terms of effectiveness in achieving goals, members are selected and trained to fulfill their roles, and overall operations are based on written records and rules.

3. Divisional system As initially used in armies, the organization of troops into small, identical units, each containing all military elements (infantry, artillery, and cavalry).
Geographical divisions Divisions resulting from breaking an organization into smaller units on the basis of geography and making each division relatively independent.

4. Functional divisions Divisions resulting from breaking an organization into smaller units on the basis of specialized activities or functions, such as when a corporation has separate divisions for manufacturing, purchasing, and marketing.
Vertical integration The inclusion within an organization of the divisions that control every step in the production and distribution of some product or service.

5. Spoils system System in which the winners take over government jobs after each election.
Management Coordination of the work of others.

6. Bureaucracy A formal organization that, according to Weber, is based on (1) functional specialization (2) clear, hierarchical lines of authority (3) expert training of managers (4) decision making depending on rational rules aimed at effective pursuit of goals (5) appointment and promotion of managers on their merit, and (6) activities conducted by written communications and records.

7. Rational system approach Emphasis on the official and intended characteristics of organizations.
Natural system approach Emphasis on the informal and unintended characteristics of organizations.

8. Goal displacement What occurs when the official goals of an organization are ignored or changed.
Goal conflict Situation in which one goal of an organization limits the ability of that organization to achieve other goals; for example, the desire to avoid losses due to strikes will conflict with an organization’s goal to minimize labor costs.

9. Span of control The number of subordinates one manager can adequately supervise, often estimated as seven.
Diversified organization An organization that is not very specialized but instead pursues a wide range of goals.

10. Autonomous divisions Parts of an organization, each of which includes a full set of functional divisions.
Decentralization Dispersing of authority from a few central administrators to persons directly engaged in activities.

11. Blau’s administrative theory Theory stating that the larger the organization, the greater the proportion of total resources that must be devoted to management functions.
Management by objectives Situation in which managers and subordinates agree on goals that subordinates will try to achieve; subordinates then have maximum freedom in how they will try to reach their objectives.